$6B Merger Agreement Puts Ingram Micro Under The HNA Umbrella

By Jeremiah Shea, contributing writer

Ingram Micro, the world’s largest distributor of technology, entered into a merger agreement earlier this week with Tianjin Tianhai Investment Company, Ltd. The Hainan-based global conglomerate will acquire Ingram for $38.90 per share, with an overall value of around $6 billion. The transaction is expected to close in the second half of 2016, barring all stockholder and regulatory approvals.

While Tianjin Tianhai ultimately rolls up into the larger HNA Group, Ingram Micro operations are expected to continue running without any major disruption or changes. Ultimately, Ingram Micro will remain headquartered in Irvine, CA with the current executive staff continuing to preside over the distribution business.

HNA Group as a whole has many investments and sectors to their business including transportation, logistics, financial services, and tourism. The acquisition of such a large distribution business adds to HNA’s $90 billion in assets and specifically to their logistics portfolio as Ingram Micro delivers supply chain solutions and services. Ingram’s broad global presence, especially in emerging markets, was also likely a draw for the Chinese company.

Ingram Micro stock has been directly affected as well from the merger with stocks growing over 20 percent after the announcement of the acquisition. The news in general caught the distribution channel by surprise with many shocked to hear the news. Ingram’s reach is obvious broad with manufacturer partners that include Cisco, HP, IBM, Apple, Lenovo, Microsoft, and Samsung.

Ingram Micro’s CEO, Alain Monié said of the merger, “Our agreement to join HNA Group delivers near-term and compelling cash value to our stockholders and we expect it to provide exciting new opportunities for our vendors, customers and associates. Innovation, new services introduction, brand management and ensuring the stability and continuity of the businesses joining their enterprise are fundamental to HNA Group's overall strategy. As a part of HNA Group, we will have the ability to accelerate strategic investment, as we continue to capitalize on the constant evolution of technology and emerging trends by adding expertise, capabilities and geographic reach. Additionally, Ingram Micro will now be part of a larger organization that has complementary logistics capabilities and a strong presence in China that can further support the growth and profitability objectives of our vendor and customer partners.”

It will be interesting to see how this purchase impacts the IT supply chain later this year and into 2017. As was earlier stated, there should be no change to how Ingram operates, but this could at the very least provide some additional flexibility and agility to the distribution giant.